BreakTheChain.org

The Gift that Keeps on Taking

Date Added: Nov. 30, 2006
Last Updated: Dec. 8, 2007

Consumer warning chain letters usually are built upon believable scenarios that could easily be executed in the real world. Often, though, they describe crimes that could be committed under the right circumstances. This description of one way crooks could get the better of unsuspecting victim is somewhat simplistic, but is indeed plausible.

Once an exclusive of the customer service desk, the gift certificate - and its modern-day decendent, the gift card - are now ubiquitous fixtures of the sales floor. As the holidays approach, it is nearly impossible to walk through a store without running into a handful of gift card displays. They are in kiosks, at the end of aisles, in front of the checkout and behind it, on your way in and on your way out. They've never been more available, but could this ease of access harbor a costly danger for those consumers who take advantage of the world's most convenient gift?

It is true that, once a gift card is activated by the cashier, its serial number can be used by a scammer to make fraudulent purchases. It is also true that there have been a few reported cases of a card's number being stolen and used to drain the card before its recipient can use it, rendering the gift worthless.

There are two basic ways a thief could hijack a gift card:

1. As the letter above suggests, the crook could simply copy the numbers from the back of the card. Most modern gift cards conceal the card's 16-digit serial number (the number you'll need to make an online purchase) and 4-digit PIN (also required for online purchases) under a scratch off panel. So, to get the numbers they would need to steal your cash, the thieves would have to scratch off this panel and copy the numbers. While this wouldn't necessarily stop them, it makes it more likely they could get caught. Even if the theif did take the effort, his ploy could be easily thwarted by any alert consumer or cashier who checks to make sure the security panel is intact before buying or selling the card.
2. Or, the crook could use a more high-tech approach. According to Internet Scambusters, thieves could use "small and inexpensive" mag-strip scanners to lift the info they need without damaging the security panel. They can then use the serial number information to make purchases online when the card is activated by an unsuspecting consumer, or copy the number onto another card and use it in the store, drawing on the funds you put on it.

Of the two methods, the second is the more probable and is the one cited in the few cases where this crime has been committed. At this time, however, this scam isn't widespread, probably because it requires forethought, an up-front investment and a tangible degree of risk. It would be the act of a individual dedicated to the scam and not just a casual criminal out to score an easy buck. Scambusters points out a much bigger risk comes from purchasing fake or over-valued gift cards, or gift cards activated with stolen credit cards, from online auction sites.

Your risk for the scam in the notice above - minimal as it is - can be reduced even more by avoiding unsupervised gift-card racks on the sales floor and opting to buy your gift cards from the service desk (as the chain above recommends) or from the retailer's Web site. Also, visually inspect the card before you purchase it to ensure the security panel is intact and the magnetic strip shows no signs of having been previously swiped. For added protection, purchase cards in packaging that makes it difficult to access their backs. Then, keep your receipt as proof of purchase for as long as there is money on the card, and register the card on the company's Web site, where you can monitor its use.

References: Internet Scambusters #209